The larger your business the more specialized the need is for job duties within the company including the purchasing and procurement department. As growth occurs a purchasing department becomes divided into two separate teams: a strategic team and a tactical team. This division is not the case for each organization neither it is appropriate for all. The strategic team will lay out the strategy to be used in the purchasing department. They would handle more of the long-term planning, evaluation, analysis, and adjustments. The tactical handles the implementation of the strategy. They cover the what to do and how to do it.
What can happen is that if the same set of people that are responsible to plan, evaluate, and analyze are also responsible for the actual buying, chances are high that all these tasks will not have the level of success your company desires and may even fail. That is why it is important to understand the different applications of strategic and tactical procurement and divide responsibilities when you can, even if you don’t have clearly defined and separate divisions within your procurement team.
If you have 2 or more people in your purchasing department you can divide responsibilities. However, this division does not necessarily place one team or person beneath the other. They are two sides of the same coin and must work together to achieve the company goals.
We’ve mentioned how strategic procurement can be viewed as long term while tactical as short term. Don’t forget that both have an importance of its own. One blunder that the organizations must avoid at all cost is to place all the top talent into the strategic team and the relatively low performers into the tactical procurement team. It may seem natural to put your stronger players into the strategic team, but a balanced approach will yield far better results.
If you put the high performers on the strategic team you will often find the need to bring them in when some difficult situation arises pertaining to tactical issues. Pulling personnel from the strategic team will make the strategic team fall behind and it creates a need and dependence from the tactical side. The talent should be evenly placed in order to maximize performance of each. Another possibility the management may consider is to rotate the top performing purchasing manager in each team for six months each. This will keep the employees from being dissatisfied and stalled in their job and get the significant tactical and strategic jobs done handled by your top performers. It can also be an advantage of having worked in both teams to enhance where you work as you have a better understanding of what is going on with the other team.
Obviously there is much more that can be said about strategic vs tactical procurement so hopefully this has stirred some discussion within your business as you work to improve and strengthen your team.
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